Facebook to Pay US $5 Billion Fine Over Privacy Violations

The Chairman of the U.S. Federal Trade Commission (FTC) Joe Simons Wednesday announced that Facebook has agreed to pay US$5 billion as a penalty for its mismanagement of user privacy.

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While this is the largest U.S. fine ever imposed on a technology company, the Democratic members of the FTC complained that the sanction did not solve "Facebook's financial incentives to jeopardize personal privacy and national security."

The online social media company also pledged to comply with a series of measures to improve its operations in relation to privacy. Mark Zuckerberg, the Facebook co-founder and CEO, must personally certify the progress in this field; otherwise, he could be prosecuted with both civil and criminal charges.

U.S. authorities also said that WhatsApp, Instagram and Messenger, companies that are part of the Facebook conglomerate, must abide by the terms of the agreement.

The FTC's investigation on Facebook covered several aspects of the company's management of user data, although it placed special emphasis on the scandal involving Cambridge Analytica, a U.K. political consulting firm.

In March 2018, it was revealed that the Zuckerberg company had used data from its users without their permission to develop psychological profiles of U.S. voters. During the 2016 presidential elections, such information was allegedly sold, among others, to the campaign of the candidate Donald Trump.

The magnitude of the damage to the privacy of people caused by Facebook, however, cannot be easily estimated.

"The full scale of unauthorized collection, use, and disclosure of consumer information resulting from Facebook’s behavior is unknown due, at least in part, to the company’s lack of recordkeeping," the FTC's Facebook investigation states.

The FTC determined that Facebook broke the law by allowing third parties to get hold of that data, having used phone numbers provided for security reasons to send ads and having lied to users by telling them that their facial recognition system was deactivated by default.

The Securities Market Commission (SEC) also announced on Wednesday a US$100 million fine to Facebook for not having duly informed their investors about privacy practices, which made them take risks without knowing it.

The SEC found that the Zuckerberg company did not properly inform its investors that developers and others outside the company had obtained user data without permission, which is a violation of Facebook's own policies.